Italian Finance Minister Giovanni Tria, right, talks to European Commissioner for Economic and Financial Affairs Pierre Moscovici prior to a meeting of Eurogroup Finance Ministers at the European Council headquarters in Brussels, Monday, Nov. 5, 2018. Finance Ministers from the 19 nations using the euro currency gather in Brussels on Monday to debate draft budget plans amid tensions over whether Italy’s planned spending package breaks promises to cut public debt. (AP Photo/Francisco Seco)
Economic growth across the 19-country eurozone is expected to moderate over the next few years amid rising trade tensions around the world and higher oil prices, according to updated forecasts from the European Union.
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The EU’s executive Commission said Thursday that eurozone growth this year is expected to moderate to 2.1 percent from last year’s decade-high rate of 2.4 percent. It then expects a further easing to 1.9 percent in 2019 and 1.7 percent in 2020.
It blamed rising global uncertainty, international trade tensions, and higher oil prices for the slowdown. It also said a slower pace in the fall in unemployment could add to the dampening effect. Unemployment is projected to fall from 8.4 percent this year to 7.9 percent next and 7.5 percent in 2020.
The Commission said that economic growth will become increasingly reliant on domestic factors, with consumer spending benefiting from stronger wage growth and looser budget measures in some countries.
“Uncertainty and risks, both external and internal, are on the rise and start to take a toll on the pace of economic activity,” said Valdis Dombrovskis, the commissioner responsible for financial stability and other economic matters.
“We need to stay vigilant and work harder to reinforce the resilience of our economies.”